Tim Worstall is a Senior Fellow at the Adam Smith Institute in London, and one of the global experts on the metal scandium, one of the rare earths. His book, Chasing Rainbows, on the economics of climate change, is available at Amazon.

Caroline Lucas, the Brighton hippies' MP, gets into a muddle over energy statistics

Caroline Lucas, the Green Party MP for the hippies of Brighton, has written an open letter to David Cameron outlining what is needed to make this a green and pleasant land. It's over here at The Guardian. The "Dr" in Ms Lucas's full title (something we Brits tend not to use outside strictly relevant academic circles) was awarded for her research into Elizabethan sonnets. An education which, as we shall see, is of dubious use in planning how this green and pleasant kingdom should power itself. She writes:

But it is disingenuous to demand that renewables suddenly become financially sustainable at the same time as your government is indirectly subsidising the dirty fossil fuel industry to a tune of six times more than renewables.

This is not true: the subsidy to fossil fuels in the UK is not six times that to renewables. In fact, Ms Lucas herself gives us the correct figures later in the letter:

The UK fossil fuel subsidy is estimated at £3.63bn in 2010, mostly in the form of VAT breaks and considerably more than the £1.4bn subsidy for renewable energy in the same year.

Whatever 1.4 is as a portion of 3.6, it's not one sixth, is it? Our student of poetry has managed to fall over numbers: not unusual among those with humanities educations.

The "six times the subsidy" is not a UK number and therefore not one to be ascribed to Cameron's "your government". That is a global figure, as reported by the International Energy Authority. There are places which really do subsidise the use of fossil fuels: Iran was recently the largest of these, with a $100 billion a year annual tab. Russia, China, Saudi Arabia etc continue the list to give us the total global subsidy. Then we've the subsidies to renewables which are concentrated in countries like the UK, Germany, US and so on (all those feed in tarrifs, renewables obligations, low interest loans and the like) and when we tot it all up we do indeed come to a global number of about 6 to 1.

But it is other governments doing the subsidising of the fossils and us doing the subsidising of the renewables. Yes, it would be a very good idea if those other countries stopped, both for the climate and for their own finances. However, to repeat: they are other countries and thus our government cannot tell them what to do.

As to the domestic subsidies, well, yes, one could consider the lower VAT rate to be a subsidy. A particularly stupid one, in fact. Here we are trying to get everyone to use less energy and one G Brown lowers the broad tax rate on it while then, later, adding all sorts of other taxes onto said energy. It was actually Norman Lamont who wanted domestic fuels to pay the full VAT whack and he was probably right to do so: nice to see Ms Lucas endorsing a Tory policy from the Major years.

However, do note that renewables benefit from the same lower VAT rate, so in fact it's not a subsidy to fossil fuel use at all: it's a subsidy, if a differential tax rate can be called a subsidy, to energy use in general, not just one form of it.

Oh, and the £1.4 billion subsidy to renewables: that is only the renewables' obligations. It takes no account at all of the other subsidies to the various technologies in the form of capital grants, low interest rates, possibly feed-in tarrifs and so on. Nor even the cap and trade costs charged on CO2 emissions, which fossil has to pay and renewables don't.

Our first lesson, therefore, being not to take numbers at face value from those who study words.

Ms Lucas also employs interesting logic:

Meanwhile, carbon capture and storage remains little more than a pipe dream, and the era of cheap fossil fuels is over.

I probably agree over "clean coal" but most certainly wouldn't over clean gas. For stripping the C out of the CH4 that is natural gas is rather simpler. So much so that BP was willing to give it a go without any direct subsidy at all. They were going to do it at Peterhead, strip the gas, burn the hydrogen and pump the CO2 into old oil wells. All would be paid for through selling the last of the oil that the CO2 forced up. Except, to make the numbers work they needed a lower royalty rate on that oil. One that G Brown refused. So, we didn't make the experiment in clean gas, that last oil didn't get pumped up and the Treasury got no tax at all instead of some at a lower rate.

Well done, eh?

But this "cheap fossil fuels is over" thing:

Instead of saying yes to shale gas exploration, the government must declare a ban on all fracking.

Well, yes, if you're going to ban extraction of cheap fossil fuels, then the era of cheap fossil fuels might be over. Rather self-fulfilling, one would have thought.

Moreover, since shale gas extraction will also divert investment away from renewables, the UK's potential reserves must be left in the ground.

This is true, too. Given that shale gas would indeed be cheap fossil fuel, then people will invest in that rather than in expensive renewables. But run the argument the other way: what Ms Lucas is admitting there is that shale gas will be cheap fossil fuel. For only if it is cheap can she be concerned that investment will go there instead of into expensive renewables. The very concern expressed proves the point: shale gas is cheap energy.

This is amusing, too:

Energy efficiency is the best way of keeping bills down, addressing fuel poverty

We're going to address fuel poverty by banning the use of cheap energy?

As to what we should actually do, my proposal is simple. We'll leave the "it ain't happening at all" to Mr Delingpole; if it is and we should do something, then that something is simply a carbon tax.

We've even had a great big report, the Stern Review, telling us what the rate should be: $80 per tonne CO2-e (to include all the methane, NOX etc as if it were CO2). Slap on that tax and lower other taxes by the same amount: say, raise the personal allowance to £12,000 or so so that those on minimum wage are no longer paying, as they currently absurdly do, income tax. Then we let the market work out what is a viable source of energy. Solar, bat choppers, nuclear, shale gas, coal, whatever. Everyone competes on an entirely level playing field. And we abolish all of the other regulations, the renewables certs, cap and trade, feed in tariffs, the lot.

The great joy of this plan is, as I've been saying for years and as the IFS and even a Nobel Laureate agree, the tax on petrol would fall by something like 14 or 15p a litre. Which is a great way to save the planet, don't you think?